Collective bank loan from a condominium

Loan taken out by the syndicate of co-owners on its behalf or for the benefit of consenting co-owners

The bank loan made in the name of the syndicate of co-owners or on behalf of voluntary co-owners may finance the following projects:

• Works voted on the common areas
• Works of collective interest on units (for example, setting up individual counters)
• Acquisition of property
• Pre-financing of public subsidies (e.g. works subsidized by the National Housing Agency (Anah) if they relate to the common or private parts and they are of collective interest).

Loan subscribed for the benefit of co-owners who have not refused

This bank loan can be used to finance the following projects:

• Works needed for the conservation of the building and the preservation of the health and physical safety of the occupants. This includes works relating to the stability of the building, the enclosure, the canopy or the networks and works to ensure that the dwellings comply with health, safety and equipment standards.

• Works made mandatory by law or regulation or by a municipal by-law relating to public safety or health
• Works involved in the implementation of real estate restoration programs, as part of safeguarding and development plans and real estate restoration
• Accessibility works for disabled persons or persons with reduced mobility, as long as they do not affect the building's structure or its essential equipment
• Removal of garbage for hygiene reasons
• Works for energy savings or reduction of greenhouse gas emissions which may include collective interest works made on the units and at the cost of the co-owner of the lot concerned, except where the latter can prove the achievement of equivalent works in the previous 10 years.

1Inclusion of the subscription of the bank loan on the agenda of the general meeting

The trustee must register in theagenda of the general assembly:

• The acquisition or works envisaged by the condominium
• The question of the subscription of the bank loan, intended to finance the acquisition or the desired works.

The general and specific terms and conditions of the draft loan agreement must be communicated at same time than the agenda. The same applies to the proposal for a commitment to joint and several guarantee intended to guarantee the loan.

These documents ensure the validity of the decision of the syndicate of co-owners. They allow the co-owner to have complete information on the overall cost of the loan (rate, duration, costs), as well as on the nature and extent of the guarantee (joint and several guarantee, implementation conditions).

2Vote at the general meeting on the subscription of a bank loan

During the same general meeting, the co-owners must vote on the financed operations (works or acquisition) and the subscription to the bank loan. These two questions are voted on separately.

Content of the decision

The general meeting cannot simply vote on the principle of resorting to a loan for the financing of the envisaged works or acquisition.

The resolution the essential conditions of the loan to be taken out, in particular:

• The loan amount
• The duration of the loan
• General terms and conditions of the loan
• Sound overall effective rate.

The authorization of the general meeting, ratifying the terms of the loan, allows the trustee to borrow on behalf of the syndicate of co-owners.

Majority rules

In principle, the decision to take out a loan is taken at unanimity the voices of co-owners.

As an exception, the decision may be voted on at the same majority than necessary for the vote of the works concerned. This concerns 3 cases:

• When the loan is used to pre-finance public grants granted to the syndicate of co-owners for the realization of voted works
• When the loan benefits only the co-owners who decide to participate
• When the loan benefits the co-owners who are considered to have agreed to participate (no refusal express to be subject to the loan).

3Adherence or refusal of co-owners to participate in the loan

Adherence to the loan

Co-owners who wish to borrow must notify their decision to trustee where the loan relates to:

• Works concerning the voted common areas
• Collective interest works on voted units
• Acquisitions in accordance with the purpose of the union and voted.

The notification is made by registered letter with acknowledgement of receipt. It must indicate the amount of the loan that the co-owner wishes to request, within the limit of its share of expenditure.

This notification of accession must take place in a 2 months delay from the notification of the minutes of the general meetingwithout its annexes, to all co-owners.

Refusal to participate in the loan

All co-owners are considered a member the taking-up of the loan where the loan relates to:

• Works necessary for the conservation of the building and the health and physical security of the occupants
• Works made mandatory by law or regulation or by a municipal by-law relating to public safety or health
• Works involved in the implementation of real estate restoration programs
• Accessibility works for disabled persons or persons with reduced mobility
• Removal of garbage for hygiene reasons
• Works to save energy or reduce greenhouse gas emissions.

The co-owners may nevertheless refuse to participate in the loan.

They must then notify their refusal to the trustee in a 2 months delay from the notification of the minutes of the general meeting. This notification is made by registered letter with acknowledgement of receipt.

They also have an obligation to pay their share of the price of works in the 6 months notification of the minutes. This share corresponds to the personal contribution due for the repayment of principal and interest, as well as the payment of fees and expenses.

4Subscription to the loan

The loan agreement is signed by the trustee. It must be in accordance with the draft attached to the agenda and voted on by the General Assembly.

The loan contract is signed after 2 months from the notification of the general meeting decision to the co-owners. After this period, the general meeting can no longer be contested by the co-owners opponents or defaulting. The decision to borrow thus becomes final.

5Payment of sums

The loan amount is paid to the syndicate of co-owners by the credit institution (bank).